ASX 200 kicks after lunch to close up 29.5 points to 5651 as results please and banks bounce. Oversold industrials attracting buyers. Asian markets limp along with Japan up 0.2% and China down 0.33%. AUD weaker at 76.31c and US Futures down on disappointing Disney numbers. RIO numbers to come.US5.1bn. Looks good. Dividend to $1.63. Will go well.

STOCKS AND SECTORS

  • Miners failed to fire today despite promising moves in iron ore futures in China. Waiting for RIO+0.81% numbers at 5pm local time tonight it seems. BHP -0.85%, Fortescue Metals (FMG) -0.15%. Galaxy Resources (GXY) -5.88% returned from a $61m capital raising at 54c with some punters happy to flip the stock.
  • Gold stocks eased after stunning moves in the last few days. Resolute Mining (RSG) -4.58%, Evolution (EVN) -2.08% and St Barbara (SBM) -3.25%. Westgold (WGX) +3.11% the recent Metals Ex (MLX) -0.66% spin off continues to find favour though.
  • Energy stocks run out before the gas station on lower WTI Crude with Woodside (WPL) -0.60%, Santos (STO) -1.29%. Paladin Energy (PDN) +8.00% after the recent consolidation.
  • Banks started firm and got firmer with a lunch kick. The BIG BANK BASKET closed at $174.44 up from $172.71. Even the regionals joined in the fun with Bank of Queensland (BOQ) +0.89% and Bendigo and Adelaide (BEN) +1.31%. Macquarie Group (MQG) +1.16% bounced after reflection on the update yesterday dragging other wealth managers into the green. Henderson Group (HGG) +3.72% and Magellan Financial (MFG) +2.89%
  • Industrials long unloved and recently out of favour have been picking up. Even the slightest good news is forcing the short sellers to rethink. Treasury Wine (TWE) +2.12%, Coca Cola Amatil (CCL) +1.13% and Costa Group (CGC) +1.20% all doing well. Seems results surprises are forcing buyers back in. In consumer stocks Yowie (YOW) +8.93% also a kinder surprise to the upside. In retails, ‘Only the strong survive’.
  • Telcos on the move too with TPG Telecom (TPM) +4.26% finally finding buyers after a huge sell off. Vocus (VOC) unchanged maybe next cab off the rank. Telstra (TLS) +0.79% gained too. IT stocks yet to feel the love though with Wisetech Global (WTC) +0.80%, Hansen Technologies (HSN) +1.58% and Xero (XRO) +1.80%
  • Healthcare stocks in out-patient department today with good gains in Sonic Healthcare (SHL) +2.08%, Primary Health Care (PRY) +1.80% and Cochlear (COH) +1.87%.
  • Speculative stock of the day: One we have talked before Corazon Ltd (CZN) +% on big volumes following massive sulphides intersected at Lynn Lake. Assay results by the end of March should make things interesting.

CORPORATE NEWS

  • Premier Investments (PMV) +11.90% after said it expected first-half retail earnings to rise as much as 10.6% to $93m. This was an update rather than the full details as the group was concerned it was being lumped in with the recent retail failures. More details on where the profits are coming form in the result soon.
  • Gemworth (GMA) -14.84% posted a 5% dive in underlying net profits to $264.7m for the year to December. The company, which provides protection to lenders from borrowers defaulting on their home loans, will pay a 14c dividend to investors. Shareholders will also pocket a 5.3c special dividend for the period. The outlook statement seemed to be the primary reason though for the stock being taken into the woodshed. Slowing property market. Hard to reconcile with NAB numbers? Mm.
  • Last result from outgoing CEO Greg Roebuck at Carsales (CAR) +7.76% with the company expecting a ‘solid uplift’ in its Latin American operations. Revenue rose 7% to $178.6m. Net profit down 8% to $47.2m and an interim dividend of 18.7c up 5%
  • Seven Group (SVW) +14.36% after Goldman Sachs upgraded the stock to “buy” from “neutral”, raising the price target to 850c from 748c.This move is just on a broker upgrade. Not numbers themselves. Worrying.
  • CIMIC (CIM) +7.59% said the outlook was “bright” after hostile takeovers of engineering groups Sedgman and UGL helped it deliver a 12% rise in annual net profit to $580.3m. The construction group’s after tax profit was at the top end of its guided range of between $520m and $580m.
  • Specialty Fashion Group (SFH) +25.96% has received a $135 million takeover offer from an undisclosed Middle East investment company.
  • Delta Partners, a US hedge fund, upped its stake in Bellamy’s Australia (BAL) -0.20% to just over 8% making it the second biggest shareholder, Bruce Neill who holds 7.4%.
  • Myer (MYR) +1.64% has lost its high- profile fashion buyer to rival David Jones. Teneille Ferguson has resigned leaving Karen Brewster at the helm in the short term. Myer said Ms Ferguson had quit Myer to “pursue other interests” and it was currently recruiting to fill the role.
  • Ardent Leisure (AAD) +2.43% revealed that January Dreamworld numbers are 50% below last January. Apparently, that is not too bad given December was 63% down.

ECONOMIC NEWS

Plenty of RBA commentary but nothing else today.

BOND CORNER

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Tosser!

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ASIAN NEWS

Iron ore on the Dalian Commodity Exchange has rallied 3.7% to 637.5 yuan ($US92.7). The spot price jumped 3.3% to $US83.29 a tonne overnight. The most-active rebar on the Shanghai Futures Exchange is up 2.3% at 3,202 yuan a tonne.

EUROPE AND US

  • It’s on. The world’s biggest IPO for Aramco, the Saudi Arabian national oil company. The sole equity adviser will be Moelis. Big coup. The Saudi oil minister is doubtful on shale oil surge.
  • Large buybacks and dividends could be the future for US banks as they hold around US$120bn of excess capital.

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  • Greece is still the word apparently as the EU faces a crisis as Greek debts explode, according to the IMF which knows a bit about these things. Drop in the French, Dutch and German elections and it is going to be an interesting year in the EU.

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  • Even if Greece successfully implements all of its planned financial and economic its debt is projected to fall to from 179% of GDP a year ago, to 160% of GDP by 2030 “but become explosive thereafter”. By 2060 its debts will amount to a crushing 275% of GDP.

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  • Despite all the doom and gloom projections for the UK after the Brexit vote especially from the Bank of England, there are rumblings that the next6 move in rates may be up given the rock star performance of the UK economy. Course it is one thing to vote quite another to actually live separately. One BOE policy maker is suggesting that inflation may surge to 2% plus quicker than anticipated.

And finally……………

A blonde, wanting to earn some money, decided to hire herself out as a handyman-type and started canvassing a wealthy neighborhood.

She went to the front door of the first house and asked the owner if he had any jobs for her to do.

“Well, you can paint my porch. How much will you charge?”

The blonde said “How about 50 dollars?” The man agreed and told her that the paint and other materials that she might need were in the garage.

The man’s wife, inside the house, heard the conversation and said to her husband, “Does she realize that the porch goes all the way around the house?”

The man replied, “She should, she was standing on it.”

A short time later, the blonde came to the door to collect her money. “You’re finished already?” he asked. “Yes,” the blonde answered, “and I had paint left over, so I gave it two coats.”

Impressed, the man reached in his pocket for the $50. “And by the way,” the blonde added, “it’s not a Porch, it’s a Ferrari.”

Clarence

XXXX

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NT Markets

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